ALBANY, N.Y. — While the number of Americans receiving unemployment benefits nationwide has been on the rise in recent years, it has come to a screeching stop at county jails throughout New York, where officials say an audit found more than 100 inmates receiving nearly $500,000 in fraudulent benefits.

At a joint news conference, the New York State Department of Labor and the New York State Sheriff’s Association said that they planned on “slamming the door shut” on inmates receiving ill-gotten benefits. It is illegal in New York for incarcerated persons to receive unemployment insurance benefits.

As of October 2010, the sheriffs association began supplying inmate data from its 57 correctional facilities to the labor department, where investigators will cross-reference names to make certain that inmates do not receive benefits, officials said.

“With a record number of New Yorkers relying on unemployment benefits and a record deficit in our UI Trust Fund, we knew we needed to get tougher and smarter on UI fraud,” said State Labor Commissioner Colleen C. Gardner. “These inmates were not thinking about rehabilitation; they were thinking about creative ways to continue to break the law while behind bars. This ends today.”

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Gardner said that the DOL became aware of the scam in 2009 following an audit by the Office of the State Comptroller, which spotted numerous checks going to addresses at state prison facilities. Gardner said that the DOL immediately began working with officials at the State Department of Correctional Services to check inmate records more frequently and to stop inmates from collecting unemployment insurance while serving time. The results, she said, were immediate, with 126 inmates discovered committing unemployment insurance fraud totaling more than $465,000.

The DOL then went a step further, Gardner said, gathering data from 57 county facilities across the state. Working with the sheriff’s association, officials found 84 incarcerated claimants collecting illegal UI benefits totaling $178,000; 251 prisoners receiving payments that were placed on hold pending further investigation. Since April, officials say they have stopped $750,000 in payments and have 284 cases under investigation. Four cases have been referred to District Attorney Offices for prosecution. By year’s end, officials say they expect to stop an estimated $3 million in illegal payments.

“The cooperative effort between the Department of Correctional Services and the Department of Labor has worked well to curtail fraudulent activity by offenders in state prisons and we support the expansion of this initiative to county jails,” says Brian Fischer, DOCS commissioner.

“This is a perfect example of how data sharing between different government agencies can result in the effective and efficient recovery of state tax dollars,” said Sean M. Byrne, acting commissioner of the Division of Criminal Justice Services. “In these difficult times, it is especially important to ensure that government benefits are not squandered and that the honest taxpayers of this state are not cheated. I commend Commissioner Gardner and the New York State Sheriffs’ Association for undertaking this creative and important initiative.”

Published reports indicate that inmates in New York may be receiving other types of public benefits. In an interview, Broome County Sheriff David Harder says he hadn’t encountered any inmates collecting unemployment checks, but he did know of a female inmate that had been receiving disability benefits. Harder says he reported it to state officials, but that the matter was of little interest.

Programs exist in New York and other states to help pre-release inmates that qualify for federal disability benefits to apply for or restart benefits before release, according to reports.